Hospitality in the News

Every week we comb through the news to find employment trends affecting the hospitality industry so you don’t have to. This week’s topic: are hotels cheaper than Airbnb?  

When Airbnb was founded in August 2008, its’ founders (who were welcoming guests into their home in San Francisco) had no idea it would grow to the multi-billion dollar company it is now. With over 4 million hosts around the world, Airbnb has become synonymous with affordable vacation lodging.   

Over the past decade, Airbnb has been the less expensive option for travelers seeking different options. Rather than a standard hotel room with one or two beds, Airbnb goers can find entire houses, apartments, single rooms, shared spaces, and a variety of other lodging choices. As Airbnb grew in popularity, more people joined the platform, totaling one billion guests today.  

Like every other industry, Airbnb took a hit during the pandemic. But as more people began to travel towards the end of 2020 and beginning of 2021, travelers were opting for Airbnb over traditional hotel bookings, causing Airbnb rental prices to surge. In the first quarter of this year, their prices increased by 35% (compared to 2020) with data showing “modest evidence” of hosts raising rental fees. Executive’s attribute the higher prices to pandemic travel and guests seeking larger houses outside of major cities for some R&R.  

During the first decade after its’ founding, overall Airbnb was the more affordable lodging option for travelers. But after the recent surge in prices, we have to wonder – are hotels cheaper than Airbnb now?  

Are Hotels Cheaper Than Airbnb?

Last year the average price for an Airbnb rental in the U.S. was $171/night, almost a 10% increase from 2019. In 2020, the average daily rate (ADR) for hotels in the U.S. was $103/night. Although both hotels and Airbnb rentals have experienced an increase in prices this year due to less pandemic-related restrictions, staying in a hotel is still (on average) 20% cheaper than an Airbnb. Location, time of year, and size of party (etc.) all play a part in pricing, but overall hotels seem to be a better option for affordable traveling.  

Overall, are hotels cheaper than Airbnb? The data says yes. But as the year goes on, it will be important to evaluate again to better understand how the continuation of the pandemic and the holidays impact pricing for travelers.